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Detroit Breakdown

By Tobin Harshaw December 12, 2008 8:53 amDecember 12, 2008 8:53 am

So the Senate decided there’d be no early Christmas for the Big Three — and the news is bringing some holiday cheer to Andy McCarthy at the Corner, who thinks the hedge fund that owns a majority of Chrysler but refused to invest more in the carmaker got what it deserved: “So Chrysler’s owners say, ‘You’re nuts if you think we’re going to throw our money at our loser business model’ — they sit on their own wallets, play chicken with their workers and creditors, and expect the idiot taxpayers to say, ‘No prob — we’ll pony up for you.’ All praise to Mitch McConnell for leading the charge that beat back this lunacy. Can someone explain why the White House thought this was a good idea?”

Why have unionized Detroit auto manufacturers manifestly lost out to their non-union Japanese competitors, even when it comes to building cars in the United States — to the point where Congress is presented with a choice of bailout or bankruptcy? There are some obvious culprits: shortsighted American managers, schlocky designers, an insular corporate culture. Here’s another: the very structure of Wagner Act unionism. The problem isn’t so much wages as work rules — internal strictures that make it hard for unionized competitors to constantly adapt and change production processes the way the Japanese do.

Now that everyone is criticizing work rules, it’s easy to forget that they don’t represent a perversion of the collective bargaining process — they are the intended result of that process, and were once celebrated as such.

Mustang Bobby at Bark Bark Woof Woof thinks there is a Plan B:

The Bush administration, which banked what was left of its credibility on the deal, can get the money from the $700 billion bailout already passed by the Congress in September. But the Senate Republicans have clearly proved that after all the years of rubber-stamping the deficit spending of the last eight years and basically handing the keys of the treasury to banks through deregulation, they can turn around and become the soul of Ebeneezer Scrooge in the middle of a recession — and just in time for Christmas — in order to score political points with the constituency that they betrayed.

Once again, Congressional Republicans have killed an intiative backed by both the White House and the Democrats — and I can’t imagine that the stock market will take any more kindly to this news than it did to the news that the House Republicans had voted down the first attempt at TARP.

The problem here is that there really doesn’t seem to be a Plan B: there isn’t any indication that the government is even willing to provide debtor-in-possession financing within Chapter 11. And if such financing is not forthcoming, the worst-case scenario is looking increasingly probable: an outright Chapter 7 liquidation, which would cost millions of jobs and would probably have a devastating effect — thanks to the inevitable supplier bankrupcies — on the big Japanese automakers with plants in the South. In other words, everybody loses.

Can Congress really be so pig-headed as to let this happen? Evidently, yes. Expect serious excoriation from the media: I think that most journalists have a gut-level understanding that Detroit’s massive adspend was one of the few things keeping them in a job these days. And maybe in coming days some kind of Chapter 11 solution might be cobbled together, or at least a package which helps out the suppliers and the remaining US carmakers (including Toyota, Honda, and other foreign firms with a US presence).

Why was Paulson give more than 750 billion dollars to hand out to his associates with no strings, no strictures, no openness in the process, and the automakers are being given such a difficult time in getting their kettle of cash filled by Washington?

Where were the Republicans when Paulson made his demands?

Let the vagaries of free-market capitalism play out. As they should have with the financial institutions.

If there are systemic problems with the US free-market capitalism, and there are, don’t throw cash at them.

The taxpayers are being ripped off because there was no proper oversight over the financial institutions. The US got to the moon with a few years of effort, (and that has been just such useful progress), so start building a better car from square one.

And get some of the financial wizards away from the bars they visit, and put them behind bars. Why are charges not being laid against them, for their trillion dollar plus Ponzi schemes?

There is something genuinely repulsive about these self-serving, self-righteous Republican senators who are all on the take themselves, who have shoveled taxpaer money to their friends on Wall Street, but who smirk while they send over a million workers to the end of the unemployment line while devastating America’s industrial base. The Democrats need to see to it that not one pork barrel project of these pigs at the trough is ever funded.

Senators such as Corker, Shelby and others from the good ole anti-worker-anti-union south are so clearly biased against American companies and in favor of strengthening their anti-union state-supported transplants that will drag down further the American worker to third world levels. They must be stopped from aiding the lowering of American worker standards which began in earnest when the one-sided trade policies were passed. We shall soon be on an equal playing field with the workers of Asia and Latin America. Our standard of living will follow suit. Take a trip down South and this level will become more than clear. That’s what is at stake when this civil war ends.

I’m not sure whether to be more appalled at the selective application of “principles” by these Senators or their preening madness. Is there no limit to their ideological lunacy? It’s as if the Christian Scientists decided to destroy all hospitals because faith alone should be sufficient to cure any ‘illness’. Or the crew of the Titanic decided that no life jackets could be handed out without a signed authorization by the Captain. When these pompous asses controlled Congress, there was little hesitation in throwing the country’s money or principles to the winds, but now that the need is desperate, no action can be taken without adherence to the “principles” that they’ve been casually ignoring these many years.

If we had national health care, like most of the civilized world, the auto industry, and other manufacturers would save a mint on health care benefits. And are lame duck Republican Senators eligible for unemployment insurance? We need the auto industry more than we need former Republican Senators. In a few years Mitch McChinless wiill be able to hold the Republican caucus in the Senate broom closet.

This proves once again that unions are the parasite that feeds on and eventually kills the host organism. Stop making comparisons to wall st. This is different. We don’t need, nor want, a slow, lumbering, backward-looking auto industry. The country needs a financial system to run, but we don’t need an auto industry because we have plenty of great foreign makers making great cars. Chapter 11 will allow the companies to right-size, tear up the ridiculous union contracts, and emerge leaner and meaner.

I have never voted Republican, but in this case, I applaud them for standing up to the corrupt unions, the self-serving and useless auto CEOs, and the heavy handed Democrats.

One out of ten jobs in the US depends on the automobile industry, so the Republicans’ stopping the bailout looks like they’re hoping for disaster.

Why not either (a) revoke the rule that requires 60 votes to stop a filibuster (the rule can be changed by a simple majority); or (b) do what the Republicans did when they had a majority and threatened to revoke the filibuster rule: form a bipartisan committee that, instead of ruling on judicial appointments, would determine bailout policy?

The Democrats should be as ruthless in this case as the Republicans were, especially since the non-bailout could lead to very serious implications. And the Republicans know that their standard economic policy (let the market decide!) is no longer valid, since they agreed to give Paulson, et al, lots of $$.

The fact that Republican senators are using the bailout bill as a blatant opportunity to bust the UAW and claw back worker benefits is truly repugnant. Their open contempt for the American union worker is shameful, if not surprising.

Obviously, the Repugnants leading the charge against aiding the automakers, are the same shills who pushed their states to afford FOREIGN carmakers millions in taxpayer incentives to locate cheap labor factories there. The caterwauling about the big, bad union is just that, yet it reveals for all to see that the Repugs are so virulently anti-worker/anti-union that they gladly would crash the entire economy even further just to wound the workers and, hopefully, break the UAW. Yet these same loudmouths made only token objection to bailing out Wall Street, with virtually NO strings attached, and in the end, supported it. The GOP should be re-named the Hypocrisy Party — or, more accurately, the Fascist Party.

They are playing hardball, and it’s only the bottom of the third. A solution will be reached; hundreds of billions of dollars in plant and equipment are not going to China to be melted down into DVD players. There will be a lot of haircuts to go around, and I hope the higher-ups get buzz jobs because they deserve it. But wages and bennys have to come down to meet Honda and Toyota. And a new Board and new leadership are needed to get Detroit headed towards 21st century wheels.

I’ve heard that the senators wanted the workers to take a wage cut, lowering their wages to equal the non-union factories run by Toyota and Honda in this country. Dis they tell the managers to take an equal or greater proportional pay cut? And how about cutting the pay of Senators and Congressmen by the same percentage? We might also wish to look into the benefits package these legislators pay themselves. Why should those of use who work for our living have to carry all those corporate types.

It is hypocritical for the Senate Republicans to refuse to give the automakers much needed financial help when they were willing to bail out Wall Street. Worse yet, they have the audacity to blame the autoworkers who don’t have anything to do with designing cars that American consumers don’t seem to want to buy at the moment. Up her in Canada, our federal government has been waiting to see how much the US government was going to give the Big Three, but $6 billion was proposed to help our auto companies.

Democracy fails again! This may be the best of all possible governmental systems but it frequently doesn’t work. The auto company bailout fell victim to partisan politics and the Senate once again fell victim to it’s own filibuster rules. A rule that ensures that no tough decisions and no compromises will ever be faced in the US Senate. Partisanship is enshrined as the noble solution to difficult questions. That suck’s!

I am from Detroit, and I do not think many people outside the Midwest understand the ramifications of allowing our U.S. industrial base to disappear. If one or more of the Big Three go under, the supplier companies will follow. The suppliers that provide parts to Chrysler, GM and Ford also supply to Honda, Toyota, Nissan, BMW, et al in the United States. Dealers throughout the nation will go under. The current recession will become a depression. Millions of people will be out of work. People won’t shop, get their hair done or make other discretionary purchases. These are taxpaying jobs and companies. I have a HUGE problem with the fact that these same Republican senators who defeated the loan package have no problems sending billions of dollars to Baghdad to wage war and rebuild Iraq. However, when it comes to helping a fellow American, they are not up to the task. I don’t remember seeing anyone from Halliburton or the Middle East being forced to grovel for a loan. It’s flown to them upon demand! In the days after 9/11, GM, Ford and Chrysler sent money and vehicles to help New York. I worked at Chrysler at the time, and I was proud that we supported our fellow Americans in need. How dare those senators send MY tax dollars to Iraq, with no questions asked, when we need support here. If we are attacked by a foreign power, do you think Toyota will build the needed equipment to save us? I am appalled that these senators call themselves Americans. I am even more appalled that I, through my taxes, pay their wages.

Republicans to Midwest: Drop Dead! If we can prevent up to 3 million Americans from losing their jobs, it should be done. We should especially save the jobs that allow class transition to occur. Note that none of the Republican senators opposed “giveaways” of state tax incentives to foreign automakers in their states.

Two wrongs don’t make a right! So drop all the “why can’t we waste taxpayer money on Detroit like we did on Wall Street” logic.

To survive the Detroit auto companies need new vision and a new deal with the UAW. Current management has shown that it is patently unable to make this happen. Time for new leadership then. GM needs to ditch Wagoner (and his alter ego, Henderson). And throw out the enablers, the Board of Directors, too. Afterall, they can’t stop singing the praises of failed management. And NO golden parachutes.

Throwing money at GM will just postpone the inevitable. Mr. Obama are you listening? Indeed, if there is no long term plan for viability, there can be no bailout. So far we have not seen a strong argument for a bailout, then…

And Chaper 11, embarassing as it may be, is NOT the end of the world. Chapter 11 is probably the BEST way for GM to cut the fat, get rid of six superfluous brands, reduce the dealer network and bring the UAW down to earth. This way GM will be forced to make the painful decisions. I don’t see another way.

Leave them alone, Mr. Bush! Your suddenly-forgotten-faith-in-markets needs to stand up and be counted here.

Good to see senate Republicans stand up to the anti-Republican president. Better late than never, I guess.

The UAW workers are partly to blame for not agreeing to immediately compromise. They won’t have any job, now. It seems the US workers building Toyotas, Hondas. Nissans in this country are well enough paid, and happy enough with jobs that will continue.

It is obscene that assembly line workers are getting more than $70/hr with all kinds of benefits, yet we underpay teachers and nurses in most locations in the US, Compare the salaries, and the repsponsibilities of those . Carmakers and car workers have killed their golden goose.

8/12/08
Another dirty deal bestowed on the American people at the hands of the GOP-ers. Just like the Iraq war, they gave Congress the choice between the devil and the deep. Democrats could not forsake our military even though highly opposed to their invading an innocent country.

Now, another choice is cast: bail out the power mongers, even though their greed has been the demon, or allow a workforce of untold magnitude to be without life support.

We must avoid the heinous traps set by Bush and cohorts,
i.e. cut off the auto lords completely, use bailout money to compensate idled workers until Obama’s planned employment projects reach fruition. Congress should not be made a patsy again for these destroyers of the middle class. CALL THEIR BLUFF !

The bailout plan has turned into a farce. The Southern Republicans don’t want to help the Northern auto industry because they are trying to establish an auto industry in the South. Like the governments of India, China, Japan and Korea the Southern States have funneled billions of federal and state taxpayer dollars to establish this industry, and now they want to expand it. The global economic collapse is the perfect opportunity.

Since the politicians are still playing politics I can only assume they don’t believe the economic crisis is real. It makes me wonder what they are doing with the trillions going to the banks.

Gee, I wonder if Susan (post 2) is a flaming liberal? It’s apparently unimaginable to her that there is a corrupt Democrat or the possibility that the UAW might shoulder an ounce of responsibility for the Big Three’s mess.

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The Thread is an in-depth look at how the major news events and controversies of the day are being viewed and debated across the online spectrum. Compiled by Peter Catapano, an editor in The Times’s Opinion section, the Thread is published every Saturday in response to breaking news.